Recent British Gas press ads indicated that over the last 3 years they had increased their prices by a smaller percentage than 5 competitors. But if BG’s prices still ended up higher, was this misleading?
Who: British Gas and nPower
Where: The Advertising Standards Authority
When: July 2005
nPower complained to the Advertising Standards Authority over a national press campaign by British Gas.
The British Gas ad was headlined "Price rises. How do they really stack up?" Underneath that were 6 piles of pound coins with the smallest on the left labelled British Gas and the other five piles to the right carrying competitors' names including that of nPower, all higher than the Gritish Gas pile. The percentage under the British Gas pile was 26.1% whilst the piles to the right carried percentages ranging from 26.6% to 33.1%.
Under that was the line "gas price increase since January 2002*". The small print at the bottom of the ad cross referred by the asterisk read "The percentages are calculated using energywatch suggested average annual consumptions for gas and had been averaged across all payment methods, regions and brands within the parent group. Full calculation detail available on request."
nPower's beef was that these comparisons were misleading. The crucial unspoken fact, they said, was that before any of the increases in question the base British Gas price was much higher than the prices charged by any of the other five competitors. This meant that, because British Gas prices were the highest to start with, their increases in pure monetary terms were according to nPower some of the largest imposed.
British Gas was quoted as saying that it stood by the advertising and would defend its corner vigorously, whilst the ASA confirmed simply that it was looking into the matter before determining whether to launch a formal investigation.
Why this matters:
The CAP code requires that comparative claims should neither mislead nor be likely to mislead and they should objectively compare one or more material, relevant, verifiable and representative features of competing products, which may include price.
So the question in this case boils down to whether, by failing to mention the actual prices charged by itself and its competitors at any of the relevant points in time, British Gas is in essence misleading readers.
Not pre-judging but….
We would not dream of pre-judging the ASA's verdict, although one thing we can be quite confident of is that the ASA will regard this as a case worth formally investigating.
Another aspect that is clear is that the advertisement on the face of it is by all accounts perfectly accurate insofar as it gives the percentages by which the advertiser and its five named competitors have increased prices since January 2002.
Coin piles crucial?
What may do British Gas down, however, is the fact that it illustrates the price rise increases with piles of £1 coins. These do suggest quite clearly that the actual amount paid out by consumers as a result of each of the increases was higher for the same energy, for all of the five competitors compared with British Gas. We will have to wait and see whether the substantiation supplied by the protagonists supports this implication.